Capital Credit FAQ

FAQ about Capital Credits

Just one of the advantages of being a member/owner of an electric cooperative is sharing in its success. Webster Electric Cooperative is proud to provide its member-owners with affordable electric rates. Your cooperative is equally proud to have returned to its members, over the years in the form of capital credits.

The capital credit concept is often misunderstood. The following may answer some commonly asked questions:

What are capital credits?

Webster Electric (WEC) is a cooperative, owned by its members so it does not necessarily earn profits. Instead, if revenues exceed the cost of doing business (expenses), the co-op has earned “margins” (profits). Each year, margins earned are assigned to WEC members in proportion to the amount paid in electricity during that year… these are capital credits.

Do I earn capital credits every year?

Capital credits are only assigned for a year in which WEC earns margins. Since they are your share of the margins, no credit is assigned on years of no margins. Also, you would not earn capital credits for any years you did not purchase electricity from WEC.

I have lived on Webster Electric Cooperatives’ system for a long time, could it be possible that I did not receive a check because it got returned, or lost, or the dog ate it?

Check the unclaimed check list on the $$$ page of the website for any unclaimed capital credit checks. The cooperative keeps records of all of its members and annually lists those unclaimed checks in the areas papers as well as this website.

What is the difference between an allocation and a retirement?

Each year your portion, of any margins that WEC may have are, “allocated” or assigned. When the board decides to “retire” those allocations is when you get your money.

Then how are my capital credit allocations used until they are retired to me?

That money is used for operating capital. It reduces the need for your co-op to borrow money.

Do I need to be a member for a certain amount of time before I am eligible to receive capital credits?

No. Since they are based on the percentage of electricity you paid in that year; you are eligible immediately.

Go ahead and use my allocation against my bill.

Sorry, remember that an allocation is an assignment; the board must vote on the retirement of that money.

If the Board decides not to retire capital credits for a year do I lose my money?

No, it is still assigned to you to be retired at a later date. In order to keep your costs per kilowatt low the cooperative runs as tightly as possible. Fuel prices going up, the cost of materials rising, weather related problems all can play into the cooperative not having a “good” year. The decision not to retire just means things are tight right now. WEC has paid capital credits in full, well within the acceptable guidelines of the National Rural Electric Association. Meaning we are retiring well within the standard 20 year rotation.

Is interest paid on capital credits?

No

What happens to my money if I move off the system?

The money allocated to your during your membership will be sent to you as it is retired. It is the member’s responsibility to keep the cooperative informed of address changes. According to WEC bylaws if the check is returned (bad address) or never cashed, your name will be published in two consecutive issues of a local newspaper in the county where you last received WEC electric service. Checks then unclaimed after sixty (60) days are assigned to the Cooperative.

Can my long lost cousin claim my capital credits if I should die before they are retired?

The Cooperative requires proof that you are the legal recipient of the deceased estate. You must show all the documents stating you are the heir and sign a claim form. If in fact, a fraud is committed you could be prosecuted as a felon.